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Strategic Plan - Procter and Gamble Case study

Strategic Plan

Procter and Gamble Case Study


  • P&G is a Multinational American consumer goods corporation was established in 1837 by James Gamble and William Procter.
  • The Company operates through five segments: Beauty, Grooming, Health Care, Fabric & Home Care and Baby, Feminine & Family Care.
  • The company’s total number of brands is 57 after streamlining portfolio of the company in 2014 , selling and dropping off over 100 brands from its product portfolio.
  • The Company operates in 180 countries through distributors, Modern retail, specialty, e -commerce and Neighbourhood stores .

Vision Statement (Recommendation)

Be, and be recognized as, the best consumer products and services company in the world and being the best in terms of

Business profitability, brand market leadership and product quality.

Vision Statement (Recommendation) Cont.

The original P&G’s corporate vision statement is way too broad in guiding strategic objectives.

Adding these 3 new Variables can make the vision more specific and effective in decision making and resource allocation in daily scenarios.

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Mission Statement (Recommendation)

We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers. Our global operations are centered around a strategy called All in to Win, an exceptional consumer experience. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, business partners and the communities in which we live and work to prosper.

Mission Statement (Recommendation) Cont.

The original mission statements highlights the What and why of the company’s purpose.

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The what is the product development strategy  emphasizing value and quality.

The Why is the emphasis on leadership sales, profit and value creation for stakeholders.

However, it doesn’t articulate the how, the technology or strategy to win. Also, the statement fails to capture the customer (business partner) rather than the consumer as an important stakeholder in the value matrix.

  • Integrity
  • Value Statement
  • Leadership
  • Ownership Trust
  • Passion for Winning
  • Fiscal year is July 2017 – June 2018.
  • High level of efficiency and profitability

Key 2018 Headline Data at a Glance

  • Revenue US$66.83 billion
  • Cost of Goods Sold US$33.45 billion
  • Net Income US$9.75 billion
  • Number of Employees 95,000
  • 52 Week Share price Range 75.39 – 108.68
  • Revenue per Employee $726,435
  • Income per Employee $105,978
  • Fiscal year is July – June.

2014 2015 2016 2017 2018 Comments

  • Sales/Revenue 80.51B 70.75B 65.3B 65.06B 66.83B
  • Revenue grew due to P&G’s focus on developing new territories Sales Growth – -12.12% -7.70% -0.37% 2.73%
  • Cost of Goods Sold (COGS) 40.61B 36.44B 32.19B 31.94B 33.45B
  • COGS Growth – -10.27% -11.67% -0.77% 4.72%
  • Gross Income 39.9B 34.31B 33.11B 33.12B 33.38B
  • 49.95% is a very healthy gross margin growth
  • Gross Income Growth – -14.02% -3.49% 0.02% 0.81%
  • Gross Profit Margin – – – – 49.95%
  • Net Income 11.2B 8.19B 9.93B 10.11B 9.75B
  • 14.59% is a very healthy net margin growth
  • Net Income Growth – -26.86% 21.27% 1.79% -3.55%
  • Net Margin Growth – – – – 14.59%

Key Financial trends

All values in USD

The intensity of Rival

  1. The rival intensity in this industry is very high.
  2. P&G has several strong competition like Unilever, Colgate – Palmolive, Kimberly Clark, Johnson and Johnson, Bic and Reckitt


Major competitors

Global Markets and Competition

P&G gets over 65 % of its total revenue from developed markets. In contrast, rival Unilever reports over 57 % of its revenue coming from

developing markets and 42 % from established markets. P & G’s concentration in s low -growth markets is the company’s most significant problem.

SWOT Analysis


  • Local and competition
  • Counterfeiting of products
  • Trade barriers in some countries
  • Recession
  • Consumer price sensitivity
  • Increase in cost of raw materials


  • Mergers and acquisition
  • Business diversification
  • Rural market expansion
  • Product innovation
  • Further expand developed markets
  • Expand supply chain network


  • Strong consumer goods brands
  • Economies of scale
  • Efficient product distribution network
  • Excellent R&D
  • Economies of Scale
  • High gross profit margin


  • Loss due to closure of brands
  • Imitable products
  • Organization slow decision making
  • Over reliance on establi sed countries
  • Low organic growth
  • Changing market dynamics

P&G’s Competitive Position

Porter’s Five Forces Analysis Model

Competitive Rivalry – High

  1. P&G operates in a highly competitive market
  2. High threat of competition with local and regional competitor
  3. P&G has several strong competition like Unilever, Colgate –
  4. Palmolive, Kimberly Clark, Johnson and Johnson, Bic and Reckitt Benckiser.
  5. Little brand loyalty amongst customers in the industry
  6. Competition affects generally the long term profitability of P&G.

Threat of Substitution – High

  1. There are significant numbers of substitutes of all P&G’s products .
  2. In order to distinguish itself, P &G must continually provide innovative, cutting -edge and new products and branding to the customer .
  3. Make price adjustment strategies according to the conditions of the economy especially developing nations with a lot of pricesen sitivity .

Supplier’s Bargaining Power – Low

  1. Suppliers of materials need key customers like P&G for profitable revenue generation and will very likely have little bargaining power because of its small size .
  2. There are a large number of suppliers in the market for all these suppliers .
  3. The supplier switching cost is low for P&G .
  4. P&G can use its large amounts of available cash and huge size

to its advantage during this current credit crisis .

Buyer’s Bargaining Power – Moderate

  1. Large sales of P&G sales depends upon retailers like Walmart .
  2. Over reliance on few retailers decreases the bargaining power of P&G . Retailers want high profit margin and could impose unfavorable terms of the company.
  3. Buyers switching cost is almost zero because of large numbers of substitute is available.

Threat of New Entrants – Low to Moderate

  • P&G have low threats from entrants due to the huge capital investment to enter the market.
  • P&G already has established relationship with retailers which give them advantage to acquire good shelf space.
  • P&G possess a huge portfolio of products and important amount of market share in the world .

P&G’s Industry

Procter & Gamble has become one of the biggest company’s in the global Fast moving consumer goods (FMC G ) industry with a prominent market position.

This success is partially driven by the company’s effectiveness in addressing external environment factors that affects the business.

However, macro -environment is dynamic. This dynamism presents new challenges against P&G’s operations. A PESTLE analysis of P&G helps identify these challenges and provides basis for new strategies for the consumer packaged goods business.

P&G’s performance in the consumer goods industry is directly based on the economies where the business operates.

The following economic external factors are most notable for P&G:

  • Type and stability of economic system in country of operation
  • Exchange rates & stability of host country currency.
  • Financial markets efficiency
  • Does P&G need to raise capital in local market?
  • Business cycle stage (e.g. prosperity, recession, recovery)
  • Economic growth rate
  • Disposable income levels
  • Unemployment rate
  • Inflation rate
  • Interest rates

Economic Factors

P&G depends on technologies to support its consumer goods business. Also, technological progressions influences consumers’ purchases decisions.

Technological analysis involves considerating the following impacts –

  • Technology’s influence on product offering
  • Power on cost structure
  • Impact on value chain structure in FMCG sector
  • Degree of technological diffusion
  • Technology maturity
  • Recent technological advancements by competitors

Technological Factors

P&G’s strategies comprise of processes to ensure legal compliance of its business. The external influence of rules and regulations on companies are assessed in this element of the PESTLE analysis structure.

The below legal external influences shape the policies of P&G:

  • Anti -trust law in FMCG industry and overall in the country.
  • Intellectual property law
  • Consumer protection
  • Employment law
  • Safety and health law
  • Data Protection
  • Business sustainability regulations
  • Environmental protection regulations

Legal Factors

The situation of the natural environment influences how P&G satisfies its business objectives.

Ecological external factors involves understanding the following impacts –

  • Weather
  • Climate change
  • Laws regulating environment toxic waste
  • Recycling
  • Waste management
  • Attitudes toward “green” or ecological products
  • Attitudes towards renewable energy

Environmental Factors

Productivity provides fuel for invention and investment to fast -track and maintain top – and bottom -line growth.

  • Delivering productivity to fuel investments
  • Productivity across the supply chain
  • Productivity by reinventing marketing


  • Dess, G . G ., & Davis, P. S . (1984 ). Porter’s (1980 ) generic strategies as determinants of strategic group membership and organizational performance. Academy of Management Journal , 27 (3 ), 467 -488.
  • Dockalikova , I., & Klozikova , J. (2014 , October) . MCDM Procedures in Practice : Determining the Significance of PESTLE Analysis Measures . In European Conference on Management, Leadership & Governance (p . 418 ). Academic Conferences International Limited.
  • Glazer, R . (1999 ). Competitive Advantage Through Information – Intensive Strategies . Handbook of Services Marketing and Management, 409.
  • Housing Industry Association (2011 ). An Introduction to PESTLE Analysis . HIA Ltd.
  • Merchant, H . (2014 ). Configurations of governance structure, generic strategy, and firm size. Global Strategy Journal, 4 (4 ), 292 -309.
  • Mockler , Dr . Robert J. (2007 ). Case 27 . Proctor & Gamble : The Beauty/Feminine Care Segment of the Consumer Goods Industry .
  • Murphey, M ., & Gause , R . (1974 ). UCF Research Guides . Industry Analysis . PESTLE Analysis . Business Horizons , 17 (5 ), 27 -38.
  • Parnell, J. A . (1997 ). New evidence in the generic strategy and business performance debate: A research note. British Journal of Management , 8 (2 ), 175 -181.
  • Procter & Gamble 2009 Annual Report.
  • Procter & Gamble Company. Wikinvest. Retrieved from : ://www .wikinvest .com/stock/Procter_&_Gamble_Company_(PG)
  • Spry, A ., & Lukas, B . A . (2016). Brand Portfolio Architecture and Firm Performance : The Moderating Impact of Generic Strategy. In Looking Forward, Looking Back : Drawing on the Past to Shape the Future of Marketing (pp . 866 -867 ). Springer International Publishing.
  • The Procter & Gamble Company – Who We Are.
  • The Procter & Gamble Company, Form 10 -K .
  • Varadarajan , P., & Dillon, W . R . (1982 ). Intensive growth strategies: A closer examination. Journal of Business Research , 10 (4 ), 503 -522.
  • Y?ksel , I. (2012 ). Developing a multi -criteria decision making model for PESTEL analysis. International Journal of Business and Management , 7 (24 ), 52.

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Strategic Plan - Procter and Gamble Case study. (2019, Dec 10). Retrieved from

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